The spread of company pension schemes is faltering. The social partner model is intended to remedy this.
(Photo: imago images/imagebroker)
Berlin For a long time it was considered a slow seller, the so-called social partner model, with which the grand coalition wanted to promote the spread of company pensions even in times of low interest rates. But now something is happening. The collective bargaining partners in the chemical industry have completed their concept and submitted it to the financial services regulator Bafin for review. And in the metal industry, where trade unions and employers have long been skeptical, there is movement, at least in the south-west.
The social partner model is part of the Company Pensions Strengthening Act, which the then Labor Minister Andrea Nahles (SPD) initiated and which came into force in 2018. It provides that employers and trade unions may agree company pension models with a pure contribution commitment in collective agreements.
This means that the employers guarantee that contributions will be made, but are not responsible for a certain minimum pension amount during the payment phase. In the worst case, retired employees can then even get less out than was paid in contributions.
In addition, the social partners can agree on an employer-financed security contribution. By waiving guarantees, more profitable, but also more risky forms of investment are possible, for example in shares, which are ruled out with the current methods of company pension schemes.
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This should make company pensions more attractive, the spread of which has hardly increased recently. The number of active entitlements to a company pension scheme increased significantly between 2001 and 2019 from 14.6 million to 21 million. However, the greatest increase took place in the years up to 2005, after which momentum dropped significantly.
SPD, Greens and FDP now want to strengthen company pension schemes, among other things by allowing investment opportunities with higher returns to be used. “In addition, the social partner model that was introduced in the penultimate legislative period with the company pension strengthening law must now be implemented,” the coalition agreement says almost threateningly.
As early as March 2021, the Verdi trade union and the insurer Talanx had agreed on the first social partner model in Germany by means of an in-house collective agreement. But the necessary review by the Bafin, which, in addition to the collective agreement, also looks at the pension plan or the technical calculation bases, for example, has still not been completed 15 months later.
The chemical employers’ association BAVC and the trade union IG BCE hope that things will go faster for them. The social partners in the industry, with around 580,000 employees, agreed in their collective bargaining agreement at the beginning of April to seal a collective agreement for the introduction of the social partner model by the middle of the year, which has also been successful. Here, too, it is now up to the Bafin, which was involved at an early stage.
The aim is for the chemical pension fund, which is operated jointly with the insurer R+V, to be able to offer company pensions with pure contribution plans before the end of this year. In order to limit the risk for the insured, a financial buffer is built up to mitigate downward swings in the retirement phase. In addition, employers pay a security contribution of five percent on the contributions paid.
However, chemistry is not the only industrial sector in which there is movement. In the metal and electrical industry, the social partner model was long considered dead. In 2019, the trade union congress, the highest decision-making body of IG Metall, almost passed a motion stating that the guaranteed minimum benefit and employer liability “form an indispensable basis for us possible expansion of collective agreements”. Only after a long debate was the word “essential” dropped, leaving the union a small back door.
IG Metall and the employers’ association Südwestmetall are now trying to get through this in Baden-Württemberg. There, talks between the collective bargaining parties about a social partner model are well advanced. As IG Metall district manager Roman Zitzelsberger explained to the Great Tariff Commission in June, there is “a viable model” that, according to calculations by the actuaries, works from as little as 50,000 participants. The fine adjustment is still being worked on.
If Baden-Württemberg goes ahead with a collective agreement on the social partner model, other districts could also follow at some point. And anyone who knows IG Metall knows that talks like the one in Stuttgart don’t take place without the placement of the trade union headquarters in Frankfurt.
There, however, not everyone is happy that at some point company pensions with pure contribution commitments could also be possible for metal workers. The discussion within his union about the social partner model is not yet over, said Hans-Jürgen Urban, the IG Metall board member responsible for social policy, at a conference in June.
But: “It’s too uncertain for me.” If there is something where you have to know what to expect, then it is probably the old-age security. In addition, questions about protection in the event of disability or of surviving dependents in the event of death in the social partner model are only insufficiently clarified. District manager Zitzelsberger sees it similarly. To this end, he said before the collective bargaining commission, there is still a need for discussion with politicians.
More: Handelsblatt annual conference: How company pension schemes can be strengthened